Suppose that youve been asked by the San Diego Padres baseball team to evaluate the economic impact of their new stadium by analyzing the teams attendance per game in the last year at their old stadium. After some research on the topic, you build the following model (standard errors in parentheses):

ATT= 25000+15000 WIN+ 4000 Free- 3000 Day-12000 week

(15000) (2000) (3000) (3000)

N=35, R2=.41

where:

ATT_i = the attendance at the ith game

WIN_i = the winning percentage of the opponent in the ith game

FREE_i = a dummy variable equal to 1 if the ith game was a promotion game at which something was given free to each fan, 0 otherwise

DAY_i = a dummy variable equal to 1 if the ith game was a day game and equal to 0 if the game was a night or twilight game

WEEK_i = a dummy variable equal to 1 if the ith game was during the week and equal to 0 if it was on the weekend

C) Youve included the day game variable because your boss thinks its important, but youre not sure about the impact of day games on attendance. Run a two-sided t-test around zero to test these expectations at the 5-percent level.

D) What problems appear to exist in your equation? (Hint: Do you have any unexpected signs? Do you have any coefficients that are not significantly different from zero?)

E) Which of the problems that you outlined in part d is the most worrisome? Explain your answer.

What explanation or solution can you think of for this problem? (Hint: You dont need to be a sports fan to answer this question. If you like music, think about attendance at outdoor concerts.)